Momentum & oscillatorsTrue Strength Index · TSI
Double-smoothed momentum on a bounded scale — trend direction and overbought/oversold together.
Works in most conditionsEngine-computed on a fixed sample series
What it is
The True Strength Index, or TSI, is a momentum oscillator that combines trend direction and overbought-oversold information in a single line. Created by William Blau, it double-smooths price momentum and scales the result to roughly plus or minus one hundred, producing a clean line that still reveals extremes. To a beginner it answers two questions at once: which way is momentum leaning, and has the move gone too far? Above its zero line, momentum is net positive and the bias is bullish; below zero it is bearish. Readings out near its upper and lower bands act like overbought and oversold zones. The double smoothing gives TSI a smoothness comparable to TRIX while retaining a bounded, oscillator-style scale that many traders find easier to interpret than an unbounded momentum line.
How it's calculated
TSI starts from raw momentum: the bar-to-bar price change, today's close minus yesterday's. It then double-smooths that momentum with two successive exponential moving averages — a longer one, typically 25 periods, followed by a shorter one, typically 13 — producing a smoothed measure of net directional momentum. Separately, it double-smooths the absolute value of the same momentum with the identical two EMAs, giving a smoothed measure of total momentum regardless of direction. TSI is then the smoothed net momentum divided by the smoothed absolute momentum, multiplied by one hundred, which normalises the value to a bounded scale around plus or minus one hundred. Dividing by the absolute-momentum term is what keeps the oscillator bounded and comparable across time. A signal line, often a short EMA of TSI, is usually added for crossover triggers. The double smoothing on both the numerator and denominator is the source of TSI's clean, readable line.
Reading it step by step
The zero line sets the trend bias: TSI above zero means momentum is net positive and favours the long side, while below zero favours the short side. The extremes give timing — readings up near the plus-twenty-five region act as overbought and readings near minus-twenty-five as oversold, though these bands should be calibrated to the specific instrument rather than treated as fixed. A signal-line crossover provides entry and exit triggers, with TSI crossing above its signal line hinting momentum is turning up. Divergence works well too: price making a new high while TSI makes a lower high warns the move is losing strength. The most powerful readings combine the two dimensions — for instance, TSI above zero for an uptrend bias while it dips toward its lower band, marking a pullback within an uptrend. Read direction from the zero line and timing from the extremes and crossovers together.
Best timeframes and settings
The standard lengths are 25 for the longer smoothing and 13 for the shorter, which suit swing trading on daily and 4-hour charts. A signal line around 7 to 13 periods is common. Shortening the lengths makes TSI more responsive and quicker to reach its extremes, useful for faster trading but noisier; lengthening them produces a smoother, slower line better for position trading. Because it is double-smoothed, TSI already lags, so it is not primarily a scalping tool, though shorter settings can be used intraday with care. The overbought and oversold bands are not fixed — a strongly trending instrument may rarely reach the textbook levels, so you should observe where a given market actually turns and set your bands there. The responsiveness-versus-noise trade-off applies to both the smoothing lengths and the signal line. Match the settings to the instrument's own rhythm.
When and where to use it
TSI is versatile across regimes because it carries both trend and extreme information, but it is most powerful when you use the zero line for trend context and the extremes for timing within that trend. In a clear uptrend, TSI above zero keeps you biased long while its dips toward the lower band time your entries. In pure ranges the extremes function as fade points, though divergences become more common and require care. It works on any liquid instrument and asset class. Avoid relying solely on its fixed textbook extremes without calibrating them, and be aware that in strong trends it can stay stretched. Use it when you want a single tool that answers both which way and how far. Its dual nature is its main advantage over one-dimensional oscillators.
Strategies that use it
A trend-pullback strategy combines the two dimensions: in an uptrend with TSI above zero, buy pullbacks that push TSI down toward its lower band, with a stop below the recent swing low and a target at the prior high — you are buying a dip within an established uptrend. A zero-line strategy trades TSI crossing zero as a trend-change signal, going long above and short below, ideally filtered by price structure to avoid chop. A signal-line strategy uses TSI-versus-signal crossovers for earlier entries and exits, often gated by the zero-line bias so you only take long crosses when TSI is above zero. A divergence strategy fades exhaustion when TSI diverges from price at an extreme, waiting for price confirmation before entering. The standard 25-and-13 lengths anchor all of these, adjusted for the timeframe.
Combining it with other indicators
TSI belongs to the same double-smoothed-momentum family as MACD and TRIX, so you would generally pick one as your momentum core rather than run them together. It pairs well with a trend tool — a moving average or ADX — that confirms the regime in which its zero-line bias is meaningful. Price structure such as support, resistance, and trendlines gives its overbought-oversold signals a location, so a TSI oversold reading at real support is far stronger than one in mid-air. Volume confirms the conviction behind a TSI-signalled move. The Chande Momentum Oscillator is a more responsive cousin you might choose instead for faster markets. Keep the combination lean: TSI for momentum and extremes, a trend filter for context, and price levels for location form a complete framework without redundancy.
Where it fails
The heavy smoothing that makes TSI clean also makes it lag, so like all double-smoothed tools it turns late at sharp reversals and can keep you biased the wrong way briefly after a turn. Its extremes are not fixed lines, and the classic mistake is treating the textbook plus-or-minus-twenty-five bands as universal — a strongly trending market may never reach them on one side, or may sit pinned at an extreme while the trend runs. In choppy markets its zero-line crosses can whipsaw, and divergences can persist far longer than expected before price responds. Trading its signals mechanically without price confirmation or a regime filter leads to early, losing entries. Avoid the pitfalls by calibrating the bands to each instrument, using the zero line for bias and the extremes only for timing within that bias, and confirming signals with price structure rather than acting on the oscillator alone.
A worked example
Suppose a stock is in a clear uptrend and you run TSI with the standard 25 and 13 lengths plus a 7-period signal line. TSI has been holding above zero for weeks, confirming a bullish bias, and it currently reads plus 8 while price pulls back from 60 to 57. As the dip deepens, TSI falls toward plus 2, near the lower edge of where this particular stock has bottomed on past pullbacks — not the textbook minus 25, but its own calibrated oversold zone within an uptrend. When TSI turns up and crosses above its signal line at a price of 57.30, you buy, placing a stop at 55.80 below the swing low and risking 1.50, targeting the prior high near 61 for a reward-to-risk near 2.5. Price rallies to 61.20 where TSI reaches plus 26, its typical upper extreme, and prints a lower high there while price marginally exceeds the old peak — a bearish divergence — so you take profit into strength rather than waiting for the lagging zero-line cross far below.